Cannes-winning film (inadvertently) endorses free markets and capitalism

Last week British movie director Ken Loach won his second Palme D’Or at the prestigious Cannes Film Festival. Loach’s film, I, Daniel Blake, tells the story of an English carpenter—Daniel Blake—who loses his job following a serious heart attack. Instructed by his doctor that he cannot work, he applies for unemployment insurance. He soon loses his state benefits, however, and finds himself in a bureaucratic mess that simultaneously demands he works, but insists he doesn’t.

Caught in a Kafkaesque nightmare of government lethargy and ineptitude as he attempts to appeal his case and reclaim his benefits, Blake grows increasingly desperate and disillusioned with a system of state sponsored insurance. While at a government office awaiting an appointment, Blake meets a young woman and her two children who are similarly mistreated by the impersonal machinery of state welfare. The film chronicles the friendship that develops between Blake and the young family, as they struggle through poverty and the frustrations of bureaucracy.

For good reason the film is regarded as a critique of the British welfare system. But curiously, it’s also thought to be a broadside attack on capitalism and open markets more generally. Loach may have intended that as a secondary assault, but in some important ways the film proves exactly the opposite.

Loach himself is an outspoken critic of “neoliberalism,” which he believes to be ruining Britain and Europe. At the Cannes Festival press conference he decried (what he called) the rampant push towards privatization and deregulation that characterizes the European Union’s adoption of “neoliberal policies.”

It seems to me that Loach has it exactly backwards and upside down on this point.

If ever there was a move hostile to true privatization and deregulation, it’s the European Union. Brussels has not replaced any of the national, provincial or local governments, but rather has added an additional regulatory layer onto existing government bureaucracies in its drive to centralization and standardization.

Aside from Loach’s own beliefs, however, what is worthy of mention is that the film he directed is not really a critique of open markets and volunteer association (as you have in capitalist or “neoliberal” economic systems), but is, rather, a critique of government institutions that are unable to respond to individual human needs because those institutions are heavily centralized and are not chosen by individuals in any direct and free market, but rather by unelected bureaucratic groups each of which has its own unique set of preferences not necessarily shared by the intended beneficiaries of the system. Since there is no competition for the services provided by those institutions (services like welfare and unemployment insurance), there is no market discipline which forces government bureaucracies to listen to its “customers” and adapt accordingly.

Authors such as David Beito (From Mutual Aid to the Welfare State) and Marvin Olasky (The Tragedy of American Compassion) have provided rich analyses of private institutions that provided welfare, unemployment and illness insurance. These institutions varied widely in terms of membership, size and focus of need, but were unique in that individual members voluntarily joined as one would join a social club or sports team. As the state encroached on the provision of welfare (where contributions were mandatory through taxation), the inclination to pay for membership (which was voluntary) in a mutual aid society declined accordingly.

Loach may have intended to provide a critique of neoliberal policies (austerity, free markets, underfunded welfare programs) but his film inadvertently does the opposite in revealing how poorly state bureaucracies function. There is a film to be made about how free markets reduce poverty and how free association can generate better insurance outcomes, but I doubt Loach will direct it.